UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-21631
Helios Advantage Income Fund, Inc.
(Exact name of registrant as specified in charter)
Brookfield Place,
250 Vesey Street, 15th Floor,
New York, NY 10281-1023
(Address of principal executive offices) (Zip code)
Kim G. Redding,
Brookfield Place,
250 Vesey Street, 15th Floor,
New York, NY 10281-1023
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 497-3746
Date of fiscal year end: March 31, 2014
Date of reporting period: June 30, 2013
Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (Sections 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. Section 3507.
Item 1. Schedule of Investments.
Helios Advantage Income Fund, Inc.
Schedule of Investments   (Unaudited)  
June 30, 2013
  Interest
Rate 		Maturity Principal
Amount
(000s) 		Value
(Note 2)
INVESTMENT GRADE CORPORATE BONDS – 4.5%
Automotive – 1.2%
Ford Motor Co. 1
6.50 % 08/01/18 $ 650 $ 736,335
Basic Industry – 1.1%
Georgia-Pacific LLC
7.25 06/01/28 230 287,306
Georgia-Pacific LLC
7.38 12/01/25 270 343,837
Total Basic Industry
      631,143
Energy – 0.9%
Pioneer Natural Resources Co.
6.65 03/15/17 500 570,350
Services – 1.3%
Legrand France SA 1,2
8.50 02/15/25 600 754,247
Total INVESTMENT GRADE CORPORATE BONDS

(Cost $2,319,123)
      2,692,075
HIGH YIELD CORPORATE BONDS – 125.9%
Automotive – 8.3%
American Axle & Manufacturing, Inc. 1
6.25 03/15/21 1,025 1,041,656
Chrysler Group LLC/CG Co-Issuer, Inc. 1
8.25 06/15/21 800 883,000
Jaguar Land Rover Automotive PLC 2,3,4
8.13 05/15/21 575 632,500
Motors Liquidation Co. 5
7.13 07/15/13 250 25
Motors Liquidation Co. 5,6
8.38 07/15/33 1,750 175
Pittsburgh Glass Works LLC 3,4
8.50 04/15/16 775 767,250
Servus Luxembourg Holdings SCA 2
7.75 06/15/18 600 767,319
Tenneco, Inc. 1
6.88 12/15/20 775 829,250
Total Automotive
      4,921,175
Basic Industry – 24.0%
AK Steel Corp. 1
7.63 05/15/20 600 510,000
Alpha Natural Resources, Inc. 1
6.25 06/01/21 900 715,500
ArcelorMittal 2
6.13 06/01/18 625 643,750
Arch Coal, Inc. 1
7.25 06/15/21 1,400 1,134,000
Associated Materials LLC/AMH New Finance, Inc. 1
9.13 11/01/17 775 813,750
Building Materials Corporation of America 3,4
6.75 05/01/21 375 398,438
Cascades, Inc. 2
7.75 12/15/17 275 286,687
Cascades, Inc. 2
7.88 01/15/20 500 522,500
FMG Resources August 2006 Property Ltd. 2,3,4
6.88 04/01/22 500 485,000
Hexion US Finance Corp./Hexion Nova Scotia Finance ULC
9.00 11/15/20 800 764,000
Huntsman International LLC 1
8.63 03/15/21 1,000 1,097,500
INEOS Group Holdings SA 1,2,3,4
6.13 08/15/18 875 835,625
Masonite International Corp. 1,2,3,4
8.25 04/15/21 775 835,062
Millar Western Forest Products Ltd. 2
8.50 04/01/21 200 197,500
Ply Gem Industries, Inc.
8.25 02/15/18 693 738,045
Steel Dynamics, Inc.
7.63 03/15/20 425 452,625
Tembec Industries, Inc. 1,2
11.25 12/15/18 775 837,000
Trinseo Materials Operating SCA 2,3,4
8.75 02/01/19 650 620,750
USG Corp. 1
9.75 01/15/18 800 908,000
See Notes to Financial Statements.
Helios Advantage Income Fund, Inc.
Schedule of Investments   (Unaudited)  
June 30, 2013
  Interest
Rate 		Maturity Principal
Amount
(000s) 		Value
(Note 2)
HIGH YIELD CORPORATE BONDS (continued)
Verso Paper Holdings LLC/Verso Paper, Inc.
11.75% 01/15/19 $ 800 $ 824,000
Xerium Technologies, Inc.
8.88 06/15/18 650 653,250
Total Basic Industry
      14,272,982
Capital Goods – 10.7%
AAR Corp. 3,4
7.25 01/15/22 125 134,063
AAR Corp.
7.25 01/15/22 300 321,750
Berry Plastics Corp. 1
9.50 05/15/18 775 842,813
Coleman Cable, Inc. 1
9.00 02/15/18 550 583,000
Crown Cork & Seal Company, Inc. 1
7.38 12/15/26 975 1,072,500
Mueller Water Products, Inc. 1
7.38 06/01/17 775 794,375
Owens-Illinois, Inc.
7.80 05/15/18 575 658,375
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC 1
9.00 04/15/19 775 800,187
Tekni-Plex, Inc. 3,4
9.75 06/01/19 341 362,312
Terex Corp.
6.00 05/15/21 500 498,750
Terex Corp.
6.50 04/01/20 300 306,000
Total Capital Goods
      6,374,125
Consumer Cyclical – 6.7%
DineEquity, Inc. 1
9.50 10/30/18 750 832,500
Levi Strauss & Co. 1
7.63 05/15/20 750 810,000
Limited Brands, Inc.
7.60 07/15/37 475 488,062
Limited Brands, Inc.
8.50 06/15/19 300 348,000
New Albertsons, Inc.
7.75 06/15/26 750 591,563
Sally Holdings LLC/Sally Capital, Inc.
6.88 11/15/19 475 509,438
YCC Holdings LLC/Yankee Finance, Inc. 7
10.25 02/15/16 400 411,000
Total Consumer Cyclical
      3,990,563
Consumer Non-Cyclical – 3.2%
C&S Group Enterprises LLC 3,4
8.38 05/01/17 633 670,980
Easton-Bell Sports, Inc. 1
9.75 12/01/16 650 696,319
Jarden Corp. 1
7.50 05/01/17 500 548,125
Total Consumer Non-Cyclical
      1,915,424
Energy – 16.9%
BreitBurn Energy Partners LP/BreitBurn Finance Corp. 1
8.63 10/15/20 775 821,500
Calfrac Holdings LP 1,3,4
7.50 12/01/20 800 792,000
Crosstex Energy LP/Crosstex Energy Finance Corp. 1
8.88 02/15/18 675 715,500
EV Energy Partners LP/EV Energy Finance Corp. 1
8.00 04/15/19 775 782,750
FTS International Services LLC 3,4
8.13 11/15/18 292 302,950
GMX Resources, Inc. 6
11.00 12/01/17 292 251,167
Hercules Offshore, Inc. 1,3,4
10.50 10/15/17 750 800,625
Hilcorp Energy I L.P./Hilcorp Finance Co. 3,4
8.00 02/15/20 550 591,250
Key Energy Services, Inc.
6.75 03/01/21 500 480,000
Linn Energy LLC/Linn Energy Finance Corp. 1
8.63 04/15/20 800 840,000
Niska Gas Storage US LLC 1
8.88 03/15/18 750 778,125
Petroleum Geo-Services ASA 2,3,4
7.38 12/15/18 325 353,438
Precision Drilling Corp. 1,2
6.63 11/15/20 750 761,250
See Notes to Financial Statements.
Helios Advantage Income Fund, Inc.
Schedule of Investments   (Unaudited)  
June 30, 2013
  Interest
Rate 		Maturity Principal
Amount
(000s) 		Value
(Note 2)
HIGH YIELD CORPORATE BONDS (continued)
Trinidad Drilling Ltd. 1,2,3,4
7.88% 01/15/19 $ 760 $ 798,000
Venoco, Inc. 1
8.88 02/15/19 750 731,250
W&T Offshore, Inc.
8.50 06/15/19 255 263,287
Total Energy
      10,063,092
Healthcare – 9.6%
CHS/Community Health Systems, Inc.
7.13 07/15/20 425 437,750
DJO Finance LLC/DJO Finance Corp.
9.88 04/15/18 575 600,875
HCA, Inc. 1
8.00 10/01/18 775 890,281
Health Management Associates, Inc. 1
7.38 01/15/20 400 438,500
inVentiv Health, Inc. 3,4
10.75 08/15/18 300 249,000
Jaguar Holding Company II/Jaguar Merger Sub, Inc. 1,3,4
9.50 12/01/19 775 856,375
Kindred Healthcare, Inc.
8.25 06/01/19 800 820,000
Polymer Group, Inc. 1
7.75 02/01/19 750 780,000
Service Corporation International 1
6.75 04/01/16 600 644,250
Total Healthcare
      5,717,031
Media – 10.4%
ARC Document Solutions, Inc. 1
10.50 12/15/16 750 748,125
Cablevision Systems Corp. 1
8.63 09/15/17 800 908,000
CCO Holdings LLC/CCO Holdings Captial Corp. 1
8.13 04/30/20 975 1,065,187
Cenveo Corp.
8.88 02/01/18 825 796,125
Clear Channel Communications, Inc. 1
9.00 03/01/21 800 760,000
Cumulus Media Holdings, Inc. 1
7.75 05/01/19 800 782,000
Mediacom LLC/Mediacom Capital Corp. 1
9.13 08/15/19 775 833,125
National CineMedia LLC
6.00 04/15/22 275 282,219
Total Media
      6,174,781
Real Estate – 1.4%
Realogy Corp. 1,3,4
7.88 02/15/19 775 817,625
Services – 16.8%
AMC Entertainment, Inc. 1
8.75 06/01/19 875 936,250
Avis Budget Car Rental LLC/Avis Budget Finance, Inc. 1
8.25 01/15/19 775 842,812
Boyd Gaming Corp. 1
9.00 07/01/20 800 811,000
Casella Waste Systems, Inc. 1
7.75 02/15/19 1,000 950,000
Chester Downs & Marina LLC 1,3,4
9.25 02/01/20 850 820,250
CityCenter Holdings LLC/CityCenter Finance Corp. 1
7.63 01/15/16 750 791,250
Iron Mountain, Inc.
8.38 08/15/21 325 345,719
MGM Resorts International 1
7.63 01/15/17 775 846,687
MTR Gaming Group, Inc. 1
11.50 08/01/19 803 839,109
Palace Entertainment Holdings LLC 1,3,4
8.88 04/15/17 775 798,250
PulteGroup, Inc. 1
6.38 05/15/33 750 701,250
United Rentals North America, Inc.
7.63 04/15/22 425 460,063
United Rentals North America, Inc.
8.25 02/01/21 450 492,750
United Rentals North America, Inc. 1
10.25 11/15/19 325 364,000
Total Services
      9,999,390
See Notes to Financial Statements.
Helios Advantage Income Fund, Inc.
Schedule of Investments   (Unaudited)  
June 30, 2013
  Interest
Rate 		Maturity Principal
Amount
(000s) 		Value
(Note 2)
HIGH YIELD CORPORATE BONDS (continued)
Technology & Electronics – 3.7%
First Data Corp. 1,3,4
11.25% 01/15/21 $ 1,000 $ 997,500
Freescale Semiconductor, Inc. 1
8.05 02/01/20 775 784,688
ION Geophysical Corp. 3,4
8.13 05/15/18 450 434,250
Total Technology & Electronics
      2,216,438
Telecommunications – 12.2%
CenturyLink, Inc. 1
7.65 03/15/42 800 760,000
Cincinnati Bell, Inc. 1
8.75 03/15/18 825 826,031
Fairpoint Communications, Inc. 3,4
8.75 08/15/19 250 247,500
Frontier Communications Corp. 1
7.13 03/15/19 1,300 1,368,250
Intelsat Luxembourg SA 2,3,4
7.75 06/01/21 800 808,000
Level 3 Communications, Inc. 1
8.88 06/01/19 800 832,000
MetroPCS Wireless, Inc. 1,3,4
6.63 04/01/23 825 839,438
PAETEC Holding Corp.
9.88 12/01/18 500 552,500
Windstream Corp. 1
7.00 03/15/19 1,000 1,002,500
Total Telecommunications
      7,236,219
Utility – 2.0%
Calpine Corp. 1,3,4
7.25 10/15/17 585 609,862
NRG Energy, Inc.
8.50 06/15/19 550 587,813
Total Utility
      1,197,675
Total HIGH YIELD CORPORATE BONDS

(Cost $72,733,586)
      74,896,520
TERM LOANS – 3.2%
Albertson, Inc. 4,8
5.00 03/21/19 300 297,750
Fairpoint Communications, Inc. 4,8
7.50 02/14/19 450 439,875
Four Seasons Holdings, Inc. 4,8
6.25 12/13/20 375 377,813
inVentiv Health, Inc. 4,8
7.50 08/04/16 575 563,500
Texas Competitive Electric Holdings Company LLC 4,8
4.69 10/10/17 3 2,347
Texas Competitive Electric Holdings Company LLC 4,8
4.70 10/10/17 221 153,888
Texas Competitive Electric Holdings Company LLC 4,8
4.78 10/10/17 110 76,408
Total TERM LOANS

(Cost $1,963,809)
      1,911,581
 
      Shares Value
(Note 2)
COMMON STOCKS – 2.6%
Materials – 0.4%
Huntsman Corp.
    12,400 205,344
Services – 0.6%
Cedar Fair LP
    5,600 231,840
Iron Mountain, Inc.
    5,650 150,346
Total Services
      382,186
See Notes to Financial Statements.
Helios Advantage Income Fund, Inc.
Schedule of Investments   (Unaudited)  
June 30, 2013
      Shares Value
(Note 2)
COMMON STOCKS (continued)
Telecommunications – 1.6%
AT&T, Inc.
    6,430 $ 227,622
CenturyLink, Inc.
    6,360 224,826
Frontier Communications Corp.
    108,500 439,425
Windstream Corp.
    11,050 85,196
Total Telecommunications
      977,069
Total COMMON STOCKS

(Cost $1,758,264)
      1,564,599
WARRANTS – 0.5%
Automotive – 0.5%
General Motors Financial Company, Inc. 9

Expiration: July 2016

Exercise Price: $10.00
    7,393 177,432
General Motors Financial Company, Inc. 9

Expiration: July 2019

Exercise Price: $18.33
    7,393 120,876
Total Automotive
      298,308
Total WARRANTS

(Cost $432,026)
      298,308
Total Investments – 136.7%

(Cost $79,206,808)
      81,363,083
Liabilities in Excess of Other Assets – (36.7)%
      (21,843,691)
TOTAL NET ASSETS – 100.0%
      $ 59,519,392
 
The following notes should be read in conjunction with the accompanying Schedule of Investments.
 
1 — Portion or entire principal amount pledged as collateral for margin loans.  
2 — Foreign security or a U.S. security of a foreign company.  
3 — Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may only be resold in transactions exempt from registration, normally to qualified institutional buyers. As of June 30, 2013, the total value of all such investments was $16,858,293 or 28.3% of net assets.  
4 — Private Placement.  
5 — Security fair valued in good faith pursuant to the fair value procedures adopted by the Board of Trustees. As of June 30, 2013, the total value of all such securities was $200 or less than 0.0% of net assets.  
6 — Issuer is currently in default on its regularly scheduled interest payment.  
7 — Payment in kind security.  
8 — Variable rate security – Interest rate shown is the rate in effect as of June 30, 2013.  
9 — Non-income producing security.  
See Notes to Financial Statements.
HELIOS FUNDS
Notes to Financial Statements   (Unaudited)  
June 30, 2013
Valuation of Investments: Debt securities, including U.S. government securities, listed corporate bonds, other fixed income and asset-backed securities, and unlisted securities and private placement securities, are generally valued at the bid prices furnished by an independent pricing service or, if not valued by an independent pricing service, using bid prices obtained from at least two active and reliable market makers in any such security or a broker-dealer. Short-term debt securities with remaining maturities of sixty days or less are valued at cost with interest accrued or discount accreted to the date of maturity, unless such valuation, in the judgment of the Adviser’s Valuation Committee, does not represent market value.
Investments in equity securities listed or traded on any securities exchange or traded in the over-the-counter market are valued at the last trade price as of the close of business on the valuation date. Equity securities for which no sales were reported for that date are valued at “fair value” as determined in good faith by the Advisor’s Valuation Committee. Investments in open-end registered investment companies, if any, are valued at the net asset value (“NAV”) as reported by those investment companies.
The Boards of Directors have adopted procedures for the valuation of the Funds’ securities and has designated the day to day responsibilities for valuation determinations under these procedures to the Adviser. The Board has reviewed and approved the valuation procedures utilized by the Adviser and regularly reviews the application of the procedures to the securities in the Funds’ portfolios. Securities are valued using unadjusted quoted market prices, when available, as supplied primarily by third party pricing services or dealers. When price quotations for certain securities are not readily available or cannot be determined, a significant event has occurred that would materially affect the value of the security, or if the available quotations are not believed to be reflective of the market value by the Adviser, those securities will be valued at “fair value” as determined in good faith by the Adviser’s Valuation Committee using procedures adopted by and under the supervision of the Funds’ Boards of Directors. The Valuation Committee is comprised of senior members of the Adviser’s management team. There can be no assurance that the Funds could purchase or sell a portfolio security at the price used to calculate the Funds’ NAVs.
Fair valuation procedures may be used to value a substantial portion of the assets of each Fund. A Fund may use the fair value of a security to calculate its NAV when, for example, (1) a portfolio security is not traded in a public market or the principal market in which the security trades is closed, (2) trading in a portfolio security is suspended and not resumed prior to the normal market close, (3) a portfolio security is not traded in significant volume for a substantial period, or (4) the Advisor determines that the quotation or price for a portfolio security provided by a broker-dealer or an independent pricing service is inaccurate.
The “fair value” of securities may be difficult to determine and thus judgment plays a greater role in the valuation process. The fair valuation methodology may include or consider the following guidelines, as appropriate: (1) evaluation of all relevant factors, including but not limited to, pricing history, current market level, supply and demand of the respective security; (2) comparison to the values and current pricing of securities that have comparable characteristics; (3) knowledge of historical market information with respect to the security; (4) other factors relevant to the security which would include, but not be limited to, duration, yield, fundamental analytical data, the Treasury yield curve, and credit quality.
The values assigned to fair valued investments are based on available information and do not necessarily represent amounts that might ultimately be realized, since such amounts depend on future developments inherent in long-term investments. Changes in the fair valuation of portfolio securities may be less frequent and of greater magnitude than changes in the price of portfolio securities valued at their last sale price, by an independent pricing service, or based on market quotations. Imprecision in estimating fair value can also impact the amount of unrealized appreciation or depreciation recorded for a particular portfolio security and differences in the assumptions used could result in a different determination of fair value, and those differences could be material.
The Funds have established methods of fair value measurements in accordance with GAAP. Fair value denotes the price that a Fund would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. A three-tier hierarchy has been established to
HELIOS FUNDS
Notes to Financial Statements   (Unaudited)  
June 30, 2013
maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
• Level 1 -  quoted prices in active markets for identical investments
• Level 2 -  quoted prices in markets that are not active or other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
• Level 3 -  significant unobservable inputs (including each Fund’s own assumptions in determining the fair value of investments)
The Adviser’s valuation policy, as previously stated, establishes parameters for the sources and types of valuation analysis, as well as, the methodologies and inputs the Adviser uses in determining fair value, including the use of the Adviser’s Valuation Committee. If the Valuation Committee determines that additional techniques, sources or inputs are appropriate or necessary in a given situation, such additional work will be undertaken.
To assess the continuing appropriateness of security valuations, the Adviser (or its third party service provider who is subject to oversight by the Adviser), compares daily its prior day prices, prices on comparable securities and sales prices and challenges those prices that either remain unchanged or exceeds certain tolerance levels with the third party pricing service or broker source. For those securities valued by fair valuations, the Valuation Committee reviews and affirms the reasonableness of the valuations based on such methodologies and fair value determinations on a regular basis after considering all relevant information that is reasonably available.
The inputs or methodology used for valuing investments are not necessarily an indication of the risk associated with investing in those securities.
HELIOS FUNDS
Notes to Financial Statements   (Unaudited)  
June 30, 2013
Helios Advantage Income Fund, Inc.
The following table summarizes the Fund's investments categorized in the disclosure hierarchy as of June 30, 2013:
Valuation Inputs Level 1   Level 2   Level 3   Total
Investment Grade Corporate Bonds
$ —   $ 2,692,075   $ —   $ 2,692,075
High Yield Corporate Bonds
—   74,896,320   200   74,896,520
Term Loan
—   1,911,581   —   1,911,581
Common Stocks
1,564,599   —   —   1,564,599
Warrants
298,308   —   —   298,308
Total
$ 1,862,907   $ 79,499,976   $ 200   $ 81,363,083
The following table provides quantitative information about the Fund’s Level 3 values, as well as their inputs, as of June 30, 2013. The table is not all-inclusive, but provides information on the significant Level 3 inputs.
  Quantitative Information about Level 3 Fair Value Measurements
Assets Fair Value as of June 30, 2013 Valuation Methodology Significant Unobservable Input Price
High Yield Corporate Bonds
$200 Discounted cash
flows 		Estimated residual value 0.01
The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:
Investments in Securities High Yield Corporate Bonds   Total
Balance as of March 31, 2013
$200   $200
Accrued Discounts (Premiums)
—   —
Realized Gain/(Loss)
—   —
Change in Unrealized Appreciation (Depreciation)
—   —
Purchases at cost
—   —
Sales proceeds
—   —
Transfers out of Level 3
—   —
Balance as of June 30, 2013
$200   $200
Change in unrealized gains or lossees relating to assets still held at reporting date
$ —   $ —
HELIOS FUNDS
Notes to Financial Statements   (Unaudited)  
June 30, 2013
Helios High Income Fund, Inc.
The following table summarizes the Fund's investments categorized in the disclosure hierarchy as of June 30, 2013:
Valuation Inputs Level 1   Level 2   Level 3   Total
Investment Grade Corporate Bonds
$ —   $ 2,165,425   $ —   $ 2,165,425
High Yield Corporate Bonds
—   52,930,215   150   52,930,365
Term Loan
—   1,417,729   —   1,417,729
Common Stocks
1,118,275   —   —   1,118,275
Warrants
223,781   —   —   223,781
Total
$ 1,342,056   $ 56,513,369   $ 150   $ 57,855,575
The following table provides quantitative information about the Fund’s Level 3 values, as well as their inputs, as of June 30, 2013. The table is not all-inclusive, but provides information on the significant Level 3 inputs.
  Quantitative Information about Level 3 Fair Value Measurements
Assets Fair Value as of June 30, 2013 Valuation Methodology Significant Unobservable Input Price
High Yield Corporate Bonds
$150 Discounted cash
flows 		Estimated residual value 0.01
The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:
Investments in Securities High Yield Corporate Bonds   Total
Balance as of March 31, 2013
$150   $150
Accrued Discounts (Premiums)
—   —
Realized Gain/(Loss)
—   —
Change in Unrealized Appreciation (Depreciation)
—   —
Purchases at cost
—   —
Sales proceeds
—   —
Transfers out of Level 3
—   —
Balance as of June 30, 2013
$150   $150
Change in unrealized gains or losses relating to assets still held at reporting date
$ —   $ —
HELIOS FUNDS
Notes to Financial Statements   (Unaudited)  
June 30, 2013
Helios Multi-Sector High Income Fund, Inc.
The following table summarizes the Fund's investments categorized in the disclosure hierarchy as of June 30, 2013:
Valuation Inputs Level 1   Level 2   Level 3   Total
Investment Grade Corporate Bonds
$ —   $ 2,342,289   $ —   $ 2,342,289
High Yield Corporate Bonds
—   60,481,375   175   60,481,550
Term Loan
—   1,582,221   —   1,582,221
Common Stocks
1,264,924   —   —   1,264,924
Warrants
261,024   —   —   261,024
Total
$ 1,525,948   $ 64,405,885   $ 175   $ 65,932,008
The following table provides quantitative information about the Fund’s Level 3 values, as well as their inputs, as of June 30, 2013. The table is not all-inclusive, but provides information on the significant Level 3 inputs.
  Quantitative Information about Level 3 Fair Value Measurements
Assets Fair Value as of June 30, 2013 Valuation Methodology Significant Unobservable Input Price
High Yield Corporate Bonds
$175 Discounted cash
flows 		Estimated residual value 0.01
The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:
Investments in Securities High Yield Corporate Bonds   Total
Balance as of March 31, 2013
$200   $200
Accrued Discounts (Premiums)
—   —
Realized Gain/(Loss)
—   —
Change in Unrealized Appreciation (Depreciation)
—   —
Purchases at cost
—   —
Sales proceeds
—   —
Transfers out of Level 3
—   —
Balance as of June 30, 2013
$200   $200
Change in unrealized gains or losses relating to assets still held at reporting date
$ —   $ —
HELIOS FUNDS
Notes to Financial Statements   (Unaudited)  
June 30, 2013
Helios Strategic Income Fund, Inc.
The following table summarizes the Fund's investments categorized in the disclosure hierarchy as of June 30, 2013:
Valuation Inputs Level 1   Level 2   Level 3   Total
Commercial Mortgage-Backed Securities
$ —   $ 1,554,702   $ —   $ 1,554,702
Investment Grade Corporate Bonds
—   14,136,468   —   14,136,534
High Yield Corporate Bonds
—   35,978,384   150   35,978,534
Term Loan
—   1,049,924   —   1,049,924
Common Stocks
3,182,339   —   —   3,182,339
Warrants
223,781   —   —   223,781
Total
$ 3,406,120   $ 52,719,478   $ 150   $ 56,125,748
The following table provides quantitative information about the Fund’s Level 3 values, as well as their inputs, as of June 30, 2013. The table is not all-inclusive, but provides information on the significant Level 3 inputs.
  Quantitative Information about Level 3 Fair Value Measurements
Assets Fair Value as of June 30, 2013 Valuation Methodology Significant Unobservable Input Price
High Yield Corporate Bonds
$175 Discounted cash
flows 		Estimated residual value 0.01
The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:
Investments in Securities High Yield Corporate Bonds   Total
Balance as of March 31, 2013
$200   $200
Accrued Discounts (Premiums)
—   —
Realized Gain/(Loss)
—   —
Change in Unrealized Appreciation (Depreciation)
—   —
Purchases at cost
—   —
Sales proceeds
—   —
Transfers out of Level 3
—   —
Balance as of June 30, 2013
$200   $200
Change in unrealized gains or losses relating to assets still held at reporting date
$ —   $ —
For the period ended June 30, 2013, there was no security transfer activity between Level 1 and Level 2. The basis for recognizing and valuing transfers is as of the end of the period in which the transfers occur.
HELIOS FUNDS
Notes to Financial Statements   (Unaudited)  
June 30, 2013
Borrowings
Credit facility: The Funds established a line of credit with BNP Paribas for investment purposes subject to the limitations of the 1940 Act for borrowings by registered investment companies. Each Fund pays interest in the amount of 0.80% plus the 3-month London Interbank Offered Rate on the amount outstanding and 0.80% on the line of credit that is unused. For the period ended June 30, 2013, the average interest rate paid on the amounts outstanding under the line of credit was 1.06% for Helios Advantage Income Fund, Inc., Helios High Income Fund, Inc. and Helios Multi-Sector High Income Fund, Inc. and 1.09% for Helios Strategic Income Fund, Inc.
  Helios Advantage Income Fund, Inc. Helios High Income Fund, Inc. Helios Multi-Sector High Income Fund, Inc. Helios Strategic Income Fund, Inc.
Total line of credit amount available
$27,000,000 $19,000,000 $22,000,000 $18,000,000
Line of credit outstanding at June 30, 2013
23,700,000 17,425,000 19,800,000 16,950,000
Line of credit amount unused at June 30, 2013
3,300,000 1,575,000 2,200,000 1,050,000
Average balance outstanding during the period
23,700,000 17,425,000 19,800,000 16,532,418
Interest expense incurred on line of credit

during the period
71,075 50,535 58,253 49,067
Federal Income Tax Basis: The federal income tax basis of the Funds' investments at June 30, 2013 was as follows:
Fund Cost of Investments Gross Unrealized Appreciation Gross Unrealized Depreciation Net Unrealized Appreciation
Helios Advantage Income Fund, Inc.
$79,206,808 $3,532,281 $(1,376,006) $2,156,275
Helios High Income Fund, Inc.
56,392,577 2,549,974 (1,086,976) 1,462,998
Helios Multi-Sector High Income Fund, Inc.
64,237,223 2,877,107 (1,182,322) 1,694,785
Helios Strategic Income Fund, Inc.
54,357,957 3,245,999 (1,478,208) 1,767,791
Item 2. Controls and Procedures.
(a) The Registrant’s principal executive officer and principal financial officer have concluded that the Registrant’s Disclosure Controls and Procedures are effective, based on their evaluation of such Disclosure Controls and Procedures as of a date within 90 days of the filing of this report on Form N-Q.
(b) As of the date of filing this Form N-Q, the Registrant’s principal executive officer and principal financial officer are aware of no changes in the Registrant’s internal control over financial reporting that occurred during the Registrant’s last fiscal quarter that has materially affected or is reasonably likely to materially affect the Registrant’s internal control over financial reporting.
Item 3. Exhibits
The certifications required by Rule 30a-2(a) of the 1940 Act are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Helios Advantage Income Fund, Inc.
By (Signature and Title) /s/ Kim G. Redding
 Kim G. Redding
 President and Principal Executive Officer
Date: August 27, 2013
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* /s/ Kim G. Redding
 Kim G. Redding
 President and Principal Executive Officer
Date: August 27, 2013
By (Signature and Title)* /s/ Steven M. Pires
 Steven M. Pires
 Treasurer and Principal Financial Officer
Date: August 27, 2013
* Print the name and title of each signing officer under his or her signature.
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